MEMORANDUM

To: All Department Administrators

Subject: Late Cost transfers Involving Sponsored Accounts

As per Sponsored Programs Policies and Procedures Section F., Cost Principals, Subsection 5 Cost Transfers, in accordance with OMB Circular A21, PHS Grants Policy Statement 7. Cost Transfers and NIH Grants Policy Statement (12/03).

This memorandum will serve as a reminder to all departmental administrators with respect to the University’s policy and requirements regarding cost transfers involving sponsored accounts. Cost transfers must abide by the 90 day transfer rule for corrections. Untimely Cost transfers submitted which violate the rules related to sponsored accounts can and will be disallowed by expenditure compliance. Cost transfers must be supported by documentation, an explanation of how the error occurred, a certification of the correctness of the new charge. All explanations/justifications must include what procedures have been put into place to avoid untimely submission in the future.

There are times when timely transfers cannot be submitted and will be approved with proper supporting documentation. These circumstances include:

Late Award Notification, a copy of the award must be attached to your request

Late receipt of funds, particularly pharmaceutical and cash-basis accounts, copy of the payment transmittal or DMAS receivable screen should be attached to support this claim.

Listed below are several explanations of justification, insufficient to override audit concerns regarding late transfers:

Transfer costs from one project to another or from one project segment to another to cover over draftsare not allowed

Clearing the departmental default account

Clerical error or failure to regularly review financial reports

Lack of staff sufficient to perform the task timely

Failure to coordinate or communicate between departments and other campuses

Failure of the principal investigator or research personnel to advise department of changes

And last but not least “to correct error” or “to transfer to correct account”

Late cost transfers which do not adhere to these guidelines will be returned to the initiating department as disallowed. However charges which are not applicable to the specific sponsored project must be removed and will need to be charged to a departmental unrestricted account.

Auditors of sponsored accounts pay particular attention to cost transfers. Frequent cost transfers especially at the close of the project and projects with significant overruns indicate to auditors the possibility of problems within the university’s internal controls.

Judith Mallon,

Mgr. II Collections/Effort Reporting/Payroll Default Accounts